China United Insurance Service Reports 2014 Third Quarter Financial Results

ZHENGZHOU, China and TAIPEI, Taiwan, Nov. 12, 2014 /PRNewswire/ -- China United Insurance Service, Inc. (CUIS) (OTCBB: CUII), a leading insurance intermediary company with operations in the People's Republic of China, Hong Kong and Taiwan, reported financial results for the three-month and nine-months ended September 30, 2014.

2014 Third Quarter Results

Revenues for the quarter ended September 30, 2014 increased 26% to $9.80 million, from $7.77 million in the same period last year. The increase, in part, reflected higher sales of insurance products in Taiwan through the Company's strategic alliance with AIA International Limited Taiwan Branch, as well as sales of other insurance companies' insurance products that became obsolete in August and mid-September with better incentives.

Revenues by geography were as follows:

 

		Three months ended September 30,
Geographical Area		2014		2013
PRC		$          748,295		$          550,614
Taiwan		9,046,763		7,217,715
		$        9,795,058		$        7,768,329

 

Cost of revenue for the third quarter of 2014 decreased to $5.98 million from $6.00 million for the same period a year ago. The reduction related to the timing of several types of bonuses and awards to sub-agents in Taiwan. In 2014, such grants were paid in the second quarter versus payments made in the third quarter of 2013.

Gross profit for the three months ended September 30, 2014 increased 116% to $3.81 million, from $1.76 million in the comparable quarter in 2013.

Selling expenses for the 2014 third quarter were $1.70 million, compared with $1.05 million in the same quarter a year ago. The increase was primarily related to an advertising campaign for the Company's Taiwan operation. General and administrative expenses for the third quarter of 2014 increased 34% to $3.11 million, from $2.33 million for the same period a year ago, primarily due to Taiwan's business tax rate, which rose to 5% from 2% starting in 2014. Additionally, results were impacted by relocation expense of moving the Company's China headquarters to Nanjing, and the opening of a service outlet in Yunnan.

Net loss for the quarter ended September 30, 2014 was reduced to $0.78 million from a net loss of $1.40 million for the same quarter last year. The net loss attributable to CUIS' shareholders for the quarter was $0.75 million, or $0.026 per share, compared with a net loss of $1.02 million, or $0.035 per share, in the same period of 2013.

"We continue to invest in growth and building our brand across the markets we serve," said Yi Hsiao Mao, Chairman and Chief Executive Officer. "In China, we relocated our headquarters to Nanjing and opened a new service location in Yunnan to better serve the region. We also began an advertising campaign in Taiwan that will continue throughout 2015 to further connect with consumers. While these efforts increased short term operating costs, we are now beginning to see results, helping facilitate top line growth and build shareholder value."

Nine-Month 2014 Financial Results

Revenues for the first nine months of 2014 rose to $30.99 million from $29.24 million a year ago.

Revenues by geography were as follows:

 

		Nine months ended September 30,
Geographical Area		2014		2013
PRC		$         2,137,653		$       1,782,886
Taiwan		28,852,271		27,452,907
		$       30,989,923		$      29,235,793

 

Cost of the revenue for the first three quarters of 2014 was $19.68 million, compared with $17.54 million for the same period a year ago.

Gross profit for the nine months ended September 30, 2014 was $11.3 million, versus $11.70 million for the comparable period in 2013.

Selling expenses for the first nine months of 2014 were $2.44 million, compared with $1.77 million in the same period last year. General and administrative expenses for the first nine months of 2014 were $8.43 million, versus $6.76 million for the comparable period last year.

Income before income taxes for the nine months ended September 30, 2014 was $0.82 million, compared with $3.62 million in the same period in 2013. Income tax expense for the first nine months of 2014 was $1.17 million, versus $0.73 million in the comparable period last year. The increase was due to an income tax law in Taiwan which provides that a company is taxed at an additional 10% on any undistributed earnings to its shareholders. In June 2014, CUIS elected not to distribute its earnings accumulated as of December 31, 2013 in lieu of investing in future growth, which resulted in approximately $0.62 million in additional income tax.

Net loss for the nine months ended September 30, 2014 was $0.35 million, compared with net income of $2.89 million in the same period last year. Net loss attributable to CUIS' shareholders for the nine months was $0.87 million, or $0.03 per share, versus net income of $1.68 million, or $0.06 per diluted share, in the same period 2013.

About China United Insurance Service, Inc.
China United Insurance Service, Inc. was founded in 2010 with a vision to build one of the largest financial insurance service platforms in Asia and to become a multinational enterprise by leveraging the experience of its Taiwan operations and capitalizing on China's fast-growing insurance market. CUIS offers a broad range of products and services for individuals, families, and businesses, including: brokerage services for various types of life, health, personal accident, property and casualty insurance; insurance application assistance; claims advocacy; claims accounting preparation services; disaster and loss prevention; and risk assessment/risk management consulting services and the corresponding reinsurance brokerage services. In 2012, the company consolidated both Taiwan and China's operations. On April 23, 2014, CUIS invested Prime Financial Asia Ltd ("PFAL") which is a re-insurance company resided in Hong Kong. Upon the investment, CUIS would own 51% of PFAL's equity interest. The transaction was completed on April 30, 2014.

By offering innovative products, continuously improving the management system and selecting the best products to meet clients' needs, CUIS aspires to become one of Asia's leading financial insurance enterprises. For more information on CUIS, please visit: http://cuis.asia/

Forward Looking Statement
Statements in this press release may be "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward- looking statements can be identified by terminology such as "will," "expects," "believes," "anticipates," "intends," "estimates" and similar statements, and involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates and projections of CUIS and the insurance industry.  Potential risks and uncertainties include, but are not limited to, those relating to CUIS' ability to attract and retain productive agents, its ability to maintain existing and develop new business relationships with insurance companies, its ability to execute its growth strategy, its ability to adapt to the evolving regulatory environment in the Chinese insurance industry, its ability to compete effectively against its competitors, and macroeconomic conditions in China and Taiwan and the potential impact on the sales of insurance products. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict.  Therefore, actual outcomes and results may, and probably will, differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including those described above and those risks discussed from time to time in the company's filings with the Securities and Exchange Commission.

(Financial statements follow)

 

CHINA UNITED INSURANCE SERVICE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME/(LOSS)
FOR THE THREE-MONTHS AND NINE-MONTHS ENDED SEPTEMBER 30, 2014 AND 2013
(Unaudited)
	Three-Months Ended September 30,				Nine-Months Ended September 30,
	2014		2013		2014		2013
Revenues	$  9,795,058		$   7,768,329		$  30,989,923		$  29,235,793
Cost of revenue	5,984,679		6,003,344		19,683,245		17,539,790
Gross profit	3,810,379		1,764,985		11,306,678		11,696,003
Operating expenses:
Selling	1,703,365		1,045,617		2,444,031		1,772,004
General and administrative	3,114,005		2,325,135		8,433,578		6,763,354
Total operating expenses	4,817,370		3,370,752		10,877,609		8,535,358
Income from operations	(1,006,991)		(1,605,767)		(429,069)		(3,160,645)
Other income:
Interest income	54,001		32,096		147,954		80,161
Other-net	158,359		116,656		244,260		383,173
Total other income	212,360		148,752		392,214		463,334
Income before income taxes	(794,631)		(1,457,015)		821,283		3,623,979
Income tax expense	(12,753)		(57,067)		1,171,602		731,192
Net income (loss)	(781,878)		(1,399,948)		(350,319)		2,892,787
Net income attributable to the noncontrolling interests	27,876		383,072		(524,522)		(1,214,136)
Net income (loss) attributable to parent's shareholders	(754,002)		(1,016,876)		(874,841)		1,678,651
Other comprehensive items
Foreign currency translation gain (loss)	(74,965)		37,439		(111,894)		(17,278)
Other comprehensive income (loss)	-		(8)		-		(183)
Attributable to parent's shareholders	(74,965)		37,431		(111,894)		(17,461)
Other comprehensive items attributable to noncontrolling interest	120,695		(77,535)		87,224		(76,103)
Comprehensive income (loss) attributable to parent's shareholders	$  (828,967)		$    (979,445)		$  (986,735)		$  1,661,190
Comprehensive income (loss) attributable to noncontrolling interest	$    148,571		$    305,537		$  (437,298)		$ (1,290,239)
Weighted average shares outstanding:
Basic and diluted	29,100,503		29,100,503		29,100,503		29,100,503
Income (loss) per share:
Basic and diluted	$       (0.026)		$        (0.035)		$      (0.030)		$         0.058

 

CHINA UNITED INSURANCE SERVICE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 2014 AND DECEMBER 31, 2013
		September 30, 2014		December 31, 2013
		(Unaudited)
ASSETS
Current assets
Cash and cash equivalents		$   19,388,417		$   18,070,093
Marketable securities		2,531,398		2,563,685
Accounts receivable, net		3,788,684		7,282,183
Other current assets		622,516		2,329,677
Total current assets		26,331,015		30,245,638
Property, plant and equipment, net		1,206,956		1,041,189
Intangible assets		311,833		308,267
Goodwill		31,651		-
Long-term investment		100,795		102,295
Other assets		584,670		587,303
Total Assets		$   28,566,920		$   32,284,692
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Taxes payable		$      482,989		$      498,441
Unearned revenue		-		1,586,038
Other current liabilities		6,142,447		8,632,305
Due to related parties		199,756		154,798
Total current liabilities		6,825,192		10,871,582
Long-term liabilities		7,813,933		7,095,062
TOTAL LIABILITIES		14,639,125		17,966,644
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock, par value $0.00001, 10,000,000 authorized, 1,000,000 issued and outstanding		10		10
Common stock, par value $0.00001, 100,000,000 authorized, 29,100,503 issued and outstanding		291		291
Additional paid-in capital		4,674,593		4,674,593
Reserves		1,185,359		415,041
Accumulated other comprehensive loss		(187,783)		(75,888)
Retained earnings		1,953,224		3,598,383
Stockholder's equity attribute to parent's shareholder		7,625,694		8,612,430
Non-controlling interest		6,302,101		5,705,618
Total stockholders' equity		13,927,795		14,318,048
Total Liabilities and Stockholders' Equity		$   28,566,920		$   32,284,692

 

SOURCE China United Insurance Service, Inc.

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